Businesses should be aware of the advertising standards that their marketing will be required to comply with. In the UK, different rules apply depending on the medium chosen for advertising.
Understanding the advertising codes that apply and the underlying regulatory framework is particularly important in the digital age, where consumers are spending more time on devices and are exposed to an array of both online and TV marketing material.
This recent change in consumer behaviour has also resulted in a significant shift in trends in advertising complaints, away from outdoor media to online and TV. That shift has been particularly apparent since the pandemic lockdowns.
Regulatory framework
The content of advertisements is regulated by a combination of legislation and industry self-regulation. The legislation that specifically governs this area is the Consumer Protection from Unfair Trading Regulations 2008 and the Business Protection from Misleading Marketing Regulations 2008. This legislation protects consumers from unfair or misleading trading practices and bans misleading omissions and aggressive sales tactics, and is enforced by the Competition and Markets Authority (CMA) and Trading Standards.
These regulations are mirrored in the self-regulatory UK Code of Non-Broadcast Advertising, Sales Promotion and Direct Marketing (CAP Code), which applies to non-broadcast marketing communications in the UK, and the UK Code of Broadcast Advertising (BCAP Code), which applies to broadcast marketing communications in the UK. In this guide, the two codes will together be referred to as "the advertising codes". While they uphold similar standards, marketers should be aware of their differences.
The advertising codes are written by the Committee of Advertising Practice (CAP) and enforced by the Advertising Standards Authority (ASA). These regulatory bodies are the "established means" under the Consumer Protection Regulations by which unfair commercial practices are controlled. In addition to the advertising codes, ads should be compliant with any legislation, regulation or government guidance specific to different sectors. Notable examples of sector-specific rules on advertising include those that apply to medicinal products, food and food supplements, environmental claims and gambling.
Scope of the codes
The CAP Code regulates non-broadcast advertising which includes advertising in press ads; ads online - including ads and claims appearing on social media; claims that appear on companies' own websites; and marketing sent by post or email, or that appears on posters. The BCAP Code regulates advertising that appears on television or radio.
The ASA investigates complaints but also monitors ads in sectors where there are societal concerns about products. These include, for example, financial products, advertising directed at children and alcohol and tobacco, as well as the sectors mentioned above. The ASA considers a complaint based on whether the advert in question breaches the CAP Code or BCAP Code rules, rather than considering how many complaints it has caused. Therefore marketers should be mindful that it only takes one complaint for the ASA to investigate an advert.
If the ASA decides to investigate a complaint the marketer is given the opportunity to provide evidence to support the advertisement as published. If the issue is serious the ASA may require the marketer to stop airing or publishing the ad until the investigation is complete. The ASA prepares a recommendation when assessing the complaint and this is passed to the ASA Council for their consideration and final decision.
The ASA Council is the independent jury that is solely responsible for deciding if the advertising codes have been broken. The ASA Council's decisions are known as rulings, and they are published by the ASA on its website every Wednesday. The advertiser will be told in advance when the decision will be published. If it is determined that a rule or rules within either of the advertising codes have been broken the advertiser must either change the ad so that it is compliant or withdraw it. If a complaint is found by the ASA Council to be "not upheld" no further action is taken or required.
After a ruling the ASA checks ads to find out if the necessary changes have been made. On its website the ASA notes that the majority of marketers comply with the requirements of a ruling – where they do not or where the rules are persistently broken, the ASA will take further action.
Sanctions for breaches of the advertising codes and consumer protection legislation
The bad publicity that comes from the publication of upheld complaints on the ASA website and other mainstream media is considered one of the most persuasive sanctions imposed by the ASA. However, the ASA has the power to impose other sanctions, such as arranging that advertisers are refused advertising space or imposing pre-vetting requirements on the relevant marketer's ads. Trading privileges and other incentives available through advertising trade bodies could also be withdrawn. A further deterrent is the potential costs that could be incurred by marketers due to a non-compliant ad, whether through having to adjust the ad to the ASA's requirements or through a loss of their initial marketing investment.
If advertisers do not work with the ASA and change or remove their advertising as required, the ASA can refer matters to the "statutory backstop". Uncooperative non-broadcast marketers could be referred by the ASA to Trading Standards, which could begin court action; while uncooperative broadcast advertisers could be referred by the ASA to Ofcom which has the power to take regulatory action, including imposing a financial penalty.
It is also worth noting that the CMA is likely to be granted greater powers to impose penalties where there has been a breach of consumer protection law. This will apply to 'greenwashing' and sustainability claims and comparative advertising, amongst others. The new powers are likely to include fining businesses up to 10% of global turnover for consumer protection breaches; directing that redress is awarded to consumers or securing positive compliance action; and issuing fines for breaches of directions and undertakings. The Digital Markets, Competition and Consumer Bill giving the CMA these significant new powers is likely to become law in 2024.
The ASA – encouraging responsible advertising
It is the marketer's responsibility to ensure their ad is compliant with advertising regulations. By having the advertising codes, rulings and further guidance on its website, the ASA gives advertisers the tools they need to do so. The overarching message of the ASA is that adverts must be "legal, decent, honest and truthful".
Rule 1 of the CAP Code states that an advertisement must "reflect the spirit, not merely the letter of the Code" and "should be prepared with a sense of responsibility to consumers and society".
Below we have selected some of the core themes of the advertising codes to bear in mind:
Adverts must not materially mislead
The ASA will consider how the average consumer will interpret an ad in light of the overall impression the ad gives. Marketers must not mislead the consumer by omitting material information or presenting that information in an ambiguous way.
Adverts must be obviously identifiable as such
While more traditional marketing communications tend to be obviously recognisable as advertising through their content and the context in which they appear, this is not always the case with social media advertising, mainly due to the same editorial style being used by social media 'influencers' for advertising and non-advertising content. The ASA has therefore been recently taking a much closer look at those involved in this form of advertising.
In short, whenever a brand gives an influencer a payment (or any other incentive, or where an influencer is otherwise connected to the brand), or where a brand has 'editorial control' over the social media content, any content featuring or referring to the brand will come within the remit of the consumer protection legislation and advertising codes and will need to be obviously identifiable as advertising. Although what is expected by the regulators from influencers advertising goods or services on social media will depend on the circumstances, social media influencers will need to at the very least include a prominent and upfront "advertisement/ad" label at the beginning of their post, story or content.
Substantiation
Marketers should ensure they can substantiate claims made in the advert and qualify those claims where appropriate.
Before distributing or publishing the advert, marketers must hold documentary evidence to prove claims that the consumer would understand to be objective. If any significant limitations or qualifications apply these must be stated in the marketing communications. Qualifications may clarify the claim but must not contradict the claim.
Comparisons should not mislead
Comparisons of products or services must relate to products or services that meet the same need or are intended for the same purpose. The comparison must objectively compare one or more material, relevant, verifiable and representative feature of those products or services. Price comparisons must make the basis of the comparison clear.
Prices must be specific
Claims on pricing should not mislead by omission, undue emphasis or distortion. The price given should relate to the product that is featured in the advert. Where a marketer quotes a price in their marketing, that price must include any additional charges that apply to all or most buyers such as non-optional taxes, duties and fees. Products must not be described as "free" if the consumer has to pay anything other than the unavoidable cost of responding and collecting, or paying for delivery of the item.
'Green' claims should be precise, accurate and tell a balanced story
The regulators have recently stepped up their enforcement in the ‘green’ claims space. The CMA released a guidance note known as the ‘Green Claims Code’ in September 2021 while the ASA published updated green claims guidance in June 2023 clarifying, amongst other things, how businesses should communicate green claims to the public.
Some of the points covered by that guidance include that green claims should not omit significant information and 'absolute' claims must be supported by a high level of substantiation. Unless the advertising states otherwise, green claims must be based on the full life cycle of the advertised product and they must not mislead consumers about the product’s total environmental impact. Further, green claims must be clear and unambiguous and therefore should avoid featuring words such as "carbon neutral" and "net zero" that consumers are increasingly confused by. Any environmental claims must also be precise, include appropriate qualifications and tell a balanced story – they should acknowledge the less climate-positive aspects of the business’ activities, indicate how early in its sustainability journey the business is and provide details of its future planned activities.
